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SEC claims XRP holders’ intention to intervene is motivated by doubling Ripple price

Ripple flows out of exchanges as Bitcoin and Ethereum inflow spikes
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  • The Securities and Exchange Commission has urged the court not to allow XRP holders to get involved in the Ripple case.
  • Ripple suggested that there could be a role for XRP holders even if the intervention was refused.
  • Attorney John Deaton claims that other cryptocurrencies could be at stake if the SEC highlights XRP as a speculative investment.

After last week’s attempted intervention by attorney John E. Deaton on behalf of more than 10,000 XRP holders in the US Securities and Exchange Commission (SEC) case against Ripple, the response of the two parties shed new light on the future of cryptocurrency in the country.

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After denying the same request two weeks ago, attorney Deaton resubmitted his letter to intervene in the lawsuit, this time representing more than 10,000 XRP holders. According to attorney Deaton, Ripple’s attorneys suggested that there could be a role for XRP holders even if they refuse to intervene in the case.

In a letter dated March 26 to Federal Judge Analisa Torres, Jorge J. Tenrero, the Securities and Exchange Commission’s chief prosecutor, urged the court to prevent XRP holders from interfering in the SEC case against Ripple. The Securities and Exchange Commission has cited XRP investor Vladi Zakinov, who filed a class action lawsuit against the blockchain company in June 2018 who will need to join the case with other crypto holders alleging that the token was sold as unregistered security.

The SEC also argued that by allowing Deaton and the XRP holders it represents to intervene in the case, it would cause a “collapse” of claims and “almost certainty of delay, complexity, and confusion.”

While the Securities and Exchange Commission claims that a torrent of people will be able to intervene in the case if the court rules in favor of XRP holders, Deaton claims that only three other people have filed a lawsuit against Ripple and that no class action has been approved.

Although Deaton has not spoken to Ripple or its attorney regarding the latest developments, Ripple’s attorneys have confirmed that their position is conditional based on the SEC’s response. So far, Ripple has taken a neutral stance on the issue, but claims that the regulator needs to clarify the ambiguity surrounding whether the lawsuit will affect the secondary XRP market.

Deaton never claims to have lost money in XRP

According to Deaton, if crypto exchanges ask the SEC for clarity based on what was said at the discovery session on March 20, he is confident that the securities regulator will issue no-action letters to allow XRP to be re-listed and traded. He clarified that the SEC did not seek a preliminary injunction to prevent Ripple from selling the tokens, and added:

There is nothing stopping Ripple from selling #XRP to fund operations. If the SEC notifies the exchanges that it can trade #XRP and #XRP from here, Ripple has twice the money to make the case, and yes, the legal fees are an operating expense.

Quoting a previous FXStreet article, the Securities and Exchange Commission (SEC) argued that Deaton’s intention behind the intervention was to double the price of XRP after he “speculatively re-traded” the digital asset. However, attorney Deaton stated in a January tweet that except for the price suppression due to the SEC filing, he “never claimed to have lost money on XRP.”

The lawyer highlighted the “ridiculous claim” that some XRP holders bought the digital asset as a speculative investment, which “proves” that Ripple sold XRP as an investment contract. Citing the SEC’s objection to his earlier letter to the motion, attorney Deaton further hinted that the Ripple case poses a threat to all cryptocurrencies, noting that other digital assets, including Bitcoin and Ether, could also be speculative investments, according to the SEC. and stock exchanges.


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